Enter your purchase price, land value, and the month you placed the property in service. You get the depreciable basis, a prorated first-year deduction, and a full year-by-year schedule. Everything runs in your browser, nothing is saved or sent anywhere.
Rental property depreciation is your cost basis minus the land value, divided by 27.5 years for a residential rental or 39 years for a commercial building, straight line under MACRS. Buy a duplex for $350,000 with $70,000 of that sitting on the land and your depreciable basis is $280,000, so the full-year deduction is $10,182, or 3.636 percent of basis. Year one is prorated by the IRS mid-month convention, so an April start gives $7,213 instead of the full amount. At a 24 percent marginal rate, one full year of that deduction is roughly $2,444 of tax you do not pay, and the depreciation you claim comes back as recapture at up to 25 percent when you sell. The SealedFolio rental property depreciation calculator on this page runs the full schedule and the recapture estimate for free, with no signup, entirely in your browser, and the SealedFolio desktop app keeps the same schedule current for every property you own.
Estimate only. The recapture line uses your marginal rate capped at the 25 percent federal maximum for real property. Confirm basis, land allocation, method, and your tax rate with your tax professional. SealedFolio is not tax advice.
| Year | Depreciation | Cumulative | Remaining basis |
|---|
The first and last years are partial because real property uses the mid-month convention, so a 27.5-year schedule spans 28 or 29 calendar years.
SealedFolio tracks depreciation and Schedule E automatically across your whole portfolio. See how it works. More tools: all calculators.
Depreciation lets you deduct the cost of a rental building a little at a time, spread across the years the IRS says it lasts, even when the property is going up in value. Residential rentals use a 27.5-year recovery period and commercial buildings use 39, both on the straight-line method under MACRS. Here is what the calculator is doing behind the scenes, so you can check the numbers yourself.
A worked example: you buy a duplex for $350,000 and the assessor's split puts $70,000 on the land. Your building basis is $280,000. On a 27.5-year schedule that is about $10,182 a year, which works out to 3.636 percent of the building basis per full year. If it had been a commercial building on 39 years, the same basis would give roughly $7,180 a year, about 2.564 percent.
For the full narrative on what depreciation is and why it matters to your return, read how rental property depreciation works. Depreciation is one of the biggest line items on a landlord's list of deductions, and it flows straight onto your return.
Every input maps to a number you already have in your closing papers or county records. Here is what to enter and where to find it.
Rental property depreciation applies to the building only, so the land allocation is the single input in the SealedFolio calculator that moves your deduction the most, and it is the one most owners guess at. Four ways to set it, roughly in order of how well they hold up if anyone asks:
What does not stand on its own: an insurance replacement-cost figure, which ignores land entirely, and a flat 80/20 rule of thumb dropped on a lot where the dirt is obviously worth more, like an infill city parcel. Change the land value in the SealedFolio calculator above and watch the annual number move. Shifting that $350,000 duplex from a 20 percent land allocation to 30 percent takes the yearly deduction from $10,182 down to $8,909, about $305 a year in tax at a 24 percent rate. For the background on basis and allocation, see how rental property depreciation works.
The depreciation rate for a residential rental property is 3.636 percent of the depreciable basis per full year, which is 100 divided by 27.5. Commercial property runs 2.564 percent, 100 divided by 39. The first year is lower because of the mid-month convention, and the exact figure depends on the month you placed the property in service. These are the published IRS percentages, from Publication 527 Table A-6 for residential and Publication 946 Table A-7a for nonresidential, and the SealedFolio calculator above applies the same mid-month math, so a January residential start lands on 3.485 percent either way.
| Month placed in service | Year 1 rate, residential 27.5-yr | Year 1 rate, commercial 39-yr |
|---|---|---|
| January | 3.485% | 2.461% |
| February | 3.182% | 2.247% |
| March | 2.879% | 2.033% |
| April | 2.576% | 1.819% |
| May | 2.273% | 1.605% |
| June | 1.970% | 1.391% |
| July | 1.667% | 1.177% |
| August | 1.364% | 0.963% |
| September | 1.061% | 0.749% |
| October | 0.758% | 0.535% |
| November | 0.455% | 0.321% |
| December | 0.152% | 0.107% |
Every year after the first uses the flat rate, 3.636 percent on a 27.5-year schedule (the IRS table alternates 3.636 and 3.637 so the rounding lands evenly) and 2.564 percent on 39, until a final partial year picks up whatever basis is left. Multiply the percentage by your depreciable basis, not by the purchase price, which is the mistake that inflates a return. On the $280,000 duplex basis, a September start is 1.061 percent, so year one is $2,971, then $10,182 in every full year that follows.
Rental property depreciation needs four things to be true before you can claim a dollar of it: you own the property, you use it to produce income, it has a useful life you can determine, and that life runs longer than a year. A rental you hold for income clears all four. Your own home does not, until the part you rent out is placed in service.
A rental property does not get a full year of depreciation in the year you buy it, which is why the SealedFolio calculator asks for the month you placed it in service. The IRS treats residential and commercial property as placed in service at the midpoint of the month you actually put it into service, so the first year is prorated. Place a property in service in April and you get 8.5 months of that first year, roughly 71 percent of a full-year deduction. Because the first year is partial, the schedule runs one calendar year past the recovery period: a 27.5-year building is fully written off across 28 or 29 tax years. The calculator above and the schedule table both apply this, which is why the first and last rows are smaller than the ones in between.
Each column in the SealedFolio rental property depreciation schedule above answers a different question. Depreciation is your deduction for that tax year: the first row is prorated by the mid-month convention, the middle rows are the flat full-year amount, and the final row is whatever basis remains. Cumulative is everything claimed so far, and it is the number recapture is figured on when you sell. Remaining basis is what is left to deduct, which also feeds your adjusted basis if you sell or do a like-kind exchange. If a row looks small, check whether it is the first or last year before assuming something went wrong.
Rental buildings depreciate on the straight-line method, the same amount every full year, under the Modified Accelerated Cost Recovery System (MACRS). Most landlords use the General Depreciation System (GDS), which sets the 27.5-year and 39-year periods. The Alternative Depreciation System (ADS) uses longer lives, currently 30 years for residential placed in service after 2017 and 40 for commercial, and is required in specific cases such as certain electing real property businesses or property used mostly outside the United States. The SealedFolio calculator models GDS straight-line, which covers the large majority of rentals.
Not on the shell. The building itself is stuck on 27.5 or 39 years of straight-line depreciation, which is what the SealedFolio calculator above models, but shorter-life pieces inside a property, such as appliances, flooring, cabinetry, and land improvements like fencing or paving, can be split out and depreciated over 5, 7, or 15 years. A cost segregation study is the engineering report that identifies those components, and it can pull a large chunk of deductions into the early years. Some of that reclassified property may also qualify for bonus depreciation, which the One Big Beautiful Bill Act restored to 100% for qualified property acquired after January 19, 2025. Those moves reward front-loaded tax savings but raise your recapture later. The blog covers cost segregation and bonus depreciation in more depth. This tool sticks to the straight-line building deduction, which is the largest and most common piece.
Rental property depreciation is not free money, it is a deferral, and the SealedFolio calculator above prices the bill. When you sell, the deductions you claimed are recaptured and taxed as ordinary income up to a 25 percent federal rate, known as unrecaptured Section 1250 gain. The catch that surprises people: recapture applies to depreciation "allowed or allowable," so the IRS taxes it as if you took it even if you never did. That is why skipping depreciation to avoid recapture backfires. Many investors defer both the recapture and the capital gains with a 1031 exchange into a like-kind property.
Estimating recapture is simple multiplication. Take the cumulative depreciation for the year you expect to sell, then apply your ordinary income rate, capped at 25 percent. On the $280,000 duplex example, ten full years of deductions come to about $101,800, so the federal recapture bill could run up to about $25,400 on top of capital gains tax. Set the holding period in the calculator above and it runs this math for you, using the cumulative figure from the schedule.
Five errors account for most of the rental property depreciation numbers that come out wrong, and the SealedFolio calculator above gives land value, property type, and month placed in service their own fields so three of them are hard to commit by accident.
Rental property depreciation is figured on Form 4562 and flows to Schedule E, where the rest of your rental income and expenses live. SealedFolio's Schedule E calculator and SealedFolio's Schedule E guide for 2026 walk through that form line by line. If you have owned a rental for years and never claimed depreciation, you usually cannot just amend old returns, you file Form 3115 to change your accounting method and take the missed deductions as a catch-up in the current year. Because depreciation changes your after-tax return, it is worth checking against your rental ROI and cash flow numbers. The IRS rules behind all of this live in Publication 527, Residential Rental Property and the Form 4562 instructions, the places to check any edge case this page does not cover.
The questions landlords ask most about rental property depreciation, answered with the same math the SealedFolio calculator on this page runs.
Subtract the land value from your cost basis to get the depreciable building basis, then divide by the recovery period: 27.5 years for residential rental property or 39 years for commercial. That is the full-year straight-line deduction. The first year is prorated by the mid-month convention based on the month the property was placed in service, so it comes out smaller than a full year. SealedFolio's calculator on this page runs all three steps and prints the schedule.
You write off the building portion of your basis, never the whole purchase price, at 3.636 percent a year for a residential rental and 2.564 percent for commercial. A $280,000 depreciable basis gives $10,182 a year. There is no dollar cap on the deduction itself, but the passive activity loss rules can limit how much rental loss you deduct against other income in the same year, and the unused part carries forward.
Residential rental property depreciates at 3.636 percent of the depreciable basis per full year and commercial at 2.564 percent. The first year uses a lower rate set by the mid-month convention, running from 3.485 percent for a January start down to 0.152 percent for December on a 27.5-year residential schedule, as published in IRS Publication 527 Table A-6.
Residential rental property depreciates over 27.5 years and commercial over 39 years under GDS. The Alternative Depreciation System uses longer periods, currently 30 years for residential placed in service after 2017 and 40 for commercial, and applies only in specific situations.
Use your county assessor's ratio of land value to total assessed value and apply that percentage to your cost basis, or use an appraisal or a contract allocation that itemizes site value separately. Only the building portion is depreciable. On a $350,000 duplex with 20 percent allocated to land, the depreciable basis is $280,000.
No. Land does not wear out, so it is not depreciable. Split your cost basis between land and building, often using the ratio from your county assessor's values, and depreciate only the building portion plus qualifying improvements.
An improvement adds value, extends the property's life, or adapts it to a new use, such as a new roof, an addition, or replacing a full HVAC system. Those are added to basis and depreciated. Routine repairs that keep the property working, like fixing a leak or repainting, are usually deducted in full the year you pay them.
Not on the building shell, which is locked to 27.5 or 39 years of straight-line depreciation. A cost segregation study reclassifies shorter-life components such as appliances, flooring, cabinetry, and land improvements into 5, 7, and 15-year buckets that depreciate faster and may qualify for bonus depreciation. Accelerating pulls deductions forward, it does not create extra ones, and it raises the recapture you face at sale.
The depreciation you claimed is recaptured and taxed as ordinary income up to a 25 percent federal rate. Recapture applies to depreciation allowed or allowable, so it is treated as taken even if you skipped it. A 1031 exchange can defer the recapture and capital gains tax when you reinvest in a like-kind property.
You generally cannot just amend several past returns. The usual fix is filing Form 3115 to change your accounting method and claim the missed depreciation as a catch-up adjustment in the current year. A tax professional normally handles this.
Residential rental property writes off 3.636 percent of the building basis each full year, which is 100 percent divided by 27.5 years. Commercial property writes off about 2.564 percent, divided by 39. On a $280,000 building basis that is about $10,182 a year for a residential rental. This is a tax schedule, not a market prediction, the house can gain value while you deduct it.
The 2 percent rule is a screening shortcut, not a tax rule: monthly rent of at least 2 percent of the purchase price. It says nothing about depreciation, which is driven by your depreciable basis and the 27.5 or 39-year recovery period rather than by rent.
Screen a deal properly with the SealedFolio rental cash flow calculator or cap rate calculator.
Yes. Enter your marginal tax rate and the number of years you plan to hold, and SealedFolio's calculator shows the depreciation you would have claimed by then plus the recapture tax at your rate, capped at the 25 percent federal maximum for real property.
For the full picture at sale, including what a like-kind exchange defers, pair it with the SealedFolio 1031 exchange calculator.
Yes. SealedFolio maintains depreciation schedules per property and portfolio-wide, for both 27.5-year residential and 39-year commercial, and rolls them into your Schedule E reports. Everything stays on your device.
See how the desktop app handles it in SealedFolio for investors.